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How To Decide The Best Financial Advisor To Hire For The Job


You understood someday it would arrive. Retirement preparation is something you've postponed for too long but recognized that you'd ultimately need to face the music. That point has finally arrived: you have to select a financial adviser to direct you through the difficult maze of investing. It can be an overwhelming process trying to choose the top financial advisor to hire in your case--and that's the key: " For You ".

The 2010 economic state of affairs has made it tricky to plan for the future, and to grow the assets you have to realize that future. Though you will find good investments to be made, finding them demands substantial time, skill, and knowledge, in addition to access to real-time financial data and other information that is out there only to experts within the financial sector. For many people, the price of a good financial advisor is more than outweighed by the extra gains that may be realized by counting on an expert, as opposed to your own personal insight. Picking this advisor might not look a great deal less difficult than investing on your own, but with a bit of work, you'll be able to forge a relationship that will bring returns for years to come.

Absolutely the primary item is ensuring you can find someone you'll be able to trust . But is it in fact that easy? How do you avoid hiring the next Bernie Madoff? . Given recent headlines about Ponzi schemes and fraud, you may be wondering how can you avoid getting duped by a shady financial advisor? The key is being better informed and doing some homework. Here's some tips on helping you choose the right financial advisor .

Though these people may call themselves "financial advisors," they're really salesmen. They care predominantly about your investments, and maybe your insurance. A good one will ask you about your debt, your budget, your mortgage -- but they don't have a financial incentive to do so. If a financial advisor recommends that you should first contribute to your 401(k) to get the employer match, he won't make a dime for his advice. However, if he instead sells you an annuity, he pockets a handsome commission.

How are you compensated? Find out about incentives for advice, such as commission or referral fees. Financial advisors that claim to be fee-based could accept other incentives that may sway their recommendations.

Will you disclose possible conflicts of interest? To better evaluate given advice, a client should know about factors that could affect their advisor's recommendations. Any relationship, compensation or other incentive that may interfere with an advisor's ability to act in their client's best interest should be disclosed.

Are you legally obligated to act in my best interest at all times? If so, get this in writing. A financial advisor held to a fiduciary standard should be willing to do so.

The portfolio and plan that your advisor generates for you should be unique to your situation, goals, risk tolerance, and other personal factors. A good financial advisor will take the time to understand who you are and where you are going, instead of push a particular stock or scheme. They ought to be aware not only of your financial situation, but also have any necessary information about pertinent non-financial information, like a child's chronic medical needs, or having to care for an elderly relative.